Fidelity Investments and New York-listed BlackRock
have announced a long-term strategic alliance through which the two
firms will leverage each other’s strengths to deliver
exchange-traded funds and research to clients.

The move comes at a time when, according to BlackRock, the size of the
global exchange-traded products industry has now surpassed $2 trillion
(view here), while research from Fidelity suggests that ETF investing is poised to increase further in 2013.

The firms said the partnership will give Fidelity's roughly 10
million customers greater access to a range of passive ETF solutions
provided by iShares, BlackRock’s ETF business.

Mark Wiedman, global head of iShares at BlackRock, said the firms
have created an ETF manufacturing and distribution "powerhouse”, in a
move which will enable millions of investors to “maximize the value of
ETF investing”.

As a result, Fidelity will more than double its current online
commission-free ETF offerings and will create new ETF portfolio
strategies using iShares as components within its managed account
offering, the firm said.

Fidelity is increasing the number of iShares ETFs that can be traded
commission-free on Fidelity’s website from 30 to 65. The new list
includes all ten iShares Core ETFs, as well as a range of international,
domestic and specialized equity, fixed income, and commodities
offerings.

Both companies will deliver iShares ETFs to Fidelity customers through their respective retail and advisor networks.

Other benefits

Meanwhile, the link-up with BlackRock will also help Fidelity in
terms of its future passive sector investment management efforts,
while RIA customers on the Fidelity Institutional Wealth Services
platform will benefit from an expanded roster of 65 commission-free
ETFs.

Furthermore, Fidelity will extend its managed account offerings by
making available to clients new ETF managed portfolios using iShares as
components within its Portfolio Advisory Services offering, which
currently provides professional money management and access to
proprietary research through model portfolios of mutual funds and
personalized portfolios using mutual funds, ETFs and separate accounts.

Fidelity highlighted that client investments have increased by 73 per
cent within its managed accounts products over the past three years.
“Fidelity and BlackRock will jointly focus on providing innovative
ETF-based solutions on an ongoing basis as part of this partnership,” it
said.

While actively-managed sector strategies will continue to be a core
focus, Fidelity said it intends to deploy passive sector capabilities as
part of its expanding sector-based strategy, working with BlackRock as
part of those efforts.